Printable Form 2026

IRS Instruction 8850 – IRS Forms, Instructions, Pubs 2026

IRS Instruction 8850 – IRS Forms, Instructions, Pubs 2026 – The Work Opportunity Tax Credit (WOTC) has long been a valuable incentive for employers hiring individuals from specific targeted groups facing employment barriers. IRS Form 8850 plays a crucial role in this process, serving as the pre-screening notice and certification request. In this comprehensive guide, we’ll break down the instructions for Form 8850, explain its purpose, detail the targeted groups, and provide step-by-step guidance on completion and submission. Note that as of February 2026, the WOTC program expired on December 31, 2025, but many state agencies are still accepting applications pending potential congressional reauthorization.

Whether you’re an employer looking to maximize tax savings or an HR professional navigating hiring incentives, understanding these instructions can help streamline your compliance efforts. Let’s dive in.

What Is the Work Opportunity Tax Credit (WOTC)?

The WOTC is a federal tax credit designed to encourage employers to hire individuals from groups that historically face significant challenges in securing employment. Eligible employers can claim a credit against their federal income tax liability, ranging from $1,200 to $9,600 per qualified employee, depending on the targeted group, wages paid, and hours worked. The credit is calculated as a percentage of the employee’s first-year wages—typically 25% for employees working 120-400 hours and 40% for those working over 400 hours.

To claim the credit, employers must first obtain certification from their state workforce agency (SWA) confirming the new hire’s membership in a targeted group. This is where Form 8850 comes into play.

Current Status of WOTC in 2026

As of early 2026, the WOTC program’s authorization lapsed at the end of 2025. Without extension by Congress, employers cannot claim the credit for hires starting in 2026. However, bipartisan legislation has been proposed to extend it through 2030, potentially increasing credit amounts and expanding eligibility. In the meantime, SWAs are accepting and retaining Form 8850 submissions for post-2025 hires in case of retroactive reauthorization. Employers should continue pre-screening processes to be prepared.

For the latest updates, check the IRS website or consult a tax professional.

Purpose of IRS Form 8850

Form 8850, titled “Pre-Screening Notice and Certification Request for the Work Opportunity Credit,” allows employers to pre-screen job applicants and request certification from the SWA that the individual belongs to a targeted group. This form must be submitted to the SWA within 28 calendar days of the employee’s start date, along with supporting documents like ETA Form 9061 or 9062.

The instructions for Form 8850 (revised March 2021, with no major updates noted as of January 2026) guide employers on proper completion to ensure eligibility. Key changes from the Taxpayer Certainty and Disaster Tax Relief Act of 2020 include extensions and clarifications for certain groups, but no new developments have been reported recently.

Targeted Groups for WOTC Eligibility

To qualify for the credit, the employee must be certified as a member of one of the following targeted groups under IRC Section 51:

  • Qualified IV-A Recipients: Individuals receiving Temporary Assistance for Needy Families (TANF) under Title IV-A of the Social Security Act.
  • Qualified Veterans: Including unemployed veterans, disabled veterans, or those receiving SNAP benefits.
  • Qualified Ex-Felons: Individuals convicted of a felony and hired within one year of conviction or release.
  • Designated Community Residents: Ages 18-39 living in empowerment zones or rural renewal counties.
  • Vocational Rehabilitation Referrals: Individuals completing a rehabilitation plan under the Rehabilitation Act or a VA program.
  • Qualified Summer Youth Employees: Ages 16-17 from empowerment zones or rural renewal counties, hired for summer work.
  • Qualified SNAP Recipients: Ages 18-39 receiving Supplemental Nutrition Assistance Program benefits.
  • Qualified SSI Recipients: Receiving Supplemental Security Income.
  • Long-Term Family Assistance Recipients: Receiving TANF for at least 18 months.
  • Qualified Long-Term Unemployment Recipients: Unemployed for at least 27 consecutive weeks and receiving unemployment compensation.

See the full list and details in the IRS instructions or on the DOL website for verification.

Step-by-Step Instructions for Completing Form 8850

Follow these steps based on the official IRS instructions to ensure accurate submission:

  1. Employer Information (Lines 1-5): Enter your business name, EIN, address, and the date the employee began or will begin work. Also, indicate if the employee is being hired for a position in an empowerment zone or rural renewal county.
  2. Employee Information (Lines 6-10): Provide the employee’s name, SSN, and details about their targeted group membership. Check the appropriate boxes for the group (e.g., qualified veteran, ex-felon). The employee must sign and date to affirm the information under penalty of perjury.
  3. Pre-Screening Details (Lines 11-13): Confirm that the employee provided information on or before the job offer date. Note any supporting documentation.
  4. Certification Request: Sign and date as the employer, requesting SWA certification.

Important notes:

  • Use the March 2016 revision of Form 8850 with the 2021 instructions.
  • Submit to the SWA where your business is located (not the IRS).
  • Attach ETA Form 9061 (Individual Characteristics Form) or 9062 (Conditional Certification) for verification.

For state-specific SWA contacts, refer to the instructions’ appendix listing addresses and phone numbers.

How to Submit Form 8850 and Claim the Credit?

  • Submission Deadline: File with the SWA within 28 days of the employee’s start date.
  • After Certification: Once certified, claim the credit on IRS Form 5884 (Work Opportunity Credit) when filing your tax return.
  • Recordkeeping: Retain copies for at least three years.

If reauthorized retroactively, pending submissions may qualify.

  • IRS Form 5884: To calculate and claim the credit.
  • ETA Form 9061/9062: DOL forms for applicant characteristics.
  • Official IRS Resources: Visit IRS.gov/Form8850 for updates.

Conclusion

Mastering the instructions for IRS Form 8850 can unlock significant tax benefits through the WOTC, even amid its current hiatus in 2026. By pre-screening hires from targeted groups and submitting promptly, employers position themselves for potential savings. Stay informed on legislative changes, as extensions could reinstate the program retroactively. For personalized advice, consult a tax advisor or your SWA.

This guide is based on the latest available IRS instructions and should not replace professional tax guidance.